How Most Large Real Estate
Brokerages Work
So where does all that Broker Commission go? Does it goes back out to market the agents? The majority of the time the answer is No! Most brokerage firms' commissions are used to recruit more and more agents. Why do you think some or most real estate brokerages have 100-200+ agents? Is it because they have an overflow of leads they can't handle? No, not at all. Most of those 100-200+ agents are probably only closing about 4-8 deals a year. We realized that large real estate brokerages with their fancy logos and offices are all about themselves and not the agent. Branding is extremely important for any large real estate company; this is what these large Real Estate brokerages spend their money on, branding the name of their brokerage firm, NOT THEIR REALTORS.
You gave your brokerage 30%-50% to help them brand their name and what did you get in return? OH, that's right. You get to put their logo on your business cards & for sale signs.
Keep that 30%-50% you're GIVING AWAY and market yourself. That's the only way your phone will ring!
But don't I need the biggest and most fancy office to impress my clients?
No. Top producers are always out in the field, not in the office. You won't see these agents hanging around the office because they are in the field making deals happen and growing their bank accounts. I can't remember the last time I met a client in our office. The majority of the time you'll meet buyers at the homes you will be showing them or sellers at their homes on the listing appointment. Buyers and sellers only care about one thing and I can assure you its not what company you work for or if you have an executive private office or not. (send me an email & I'll let you know what clients care about, if you don't already know)
The Typical 50% - 50% Agent/Broker Split Plan
$10,000 Total Commission from a transaction
- $5,000 Broker Split
- $150 Office fee ( franchise fee, most likely not included)
You Just Lost $5,150!
The Typical 70% - 30% Agent/Broker Split Plan
$10,000 Total Commission from a transaction
- $3,000 Broker Split
- $150 Office fee (franchise fee, most likely not included)
You Just Lost $3,150!
The Large 100% Brokerage Firms
You will keep 100% of your commission at about $1,800 a month, which will not include any Texas or International franchise fees. So you want to build a team? This will most likely cost you about $600-$800 each month per agent.
